Week Ahead: The War Remains the Main Focus

Market Outlook Amid Ongoing Middle East Conflict

The ongoing conflict in the Middle East continues to be the primary factor influencing market dynamics. Despite some optimism among investors for a possible resolution in the near future, recent developments suggest uncertainty remains high. Last week, the May WTI crude oil contract closed around $111.55, reflecting concerns about potential escalation in the short term, while the June contract ended near $98 and the September contract fell below $78.

Meanwhile, the US S&P 500 index experienced its first weekly gain in six weeks, and benchmark 10-year government bond yields in both the US and Europe declined. However, the dismissal of three US army generals and renewed attacks on infrastructure in the Middle East indicate that tensions may intensify further before any signs of easing emerge.